Prosperity Bancshares Net Income Rises 24.6% on Merger Activity

The Tip Desk · July 29, 2026 · 2 min read

The bank reported diluted earnings per share of $1.67 for the second quarter, up from $1.42 a year ago.

Prosperity Bancshares (PB) reported net income of $168.6 million for the second quarter.

The results reflect a period of expansion driven by strategic acquisitions and a shift in noninterest income. The bank completed the merger of Stellar Bancorp, Inc. on July 1, 2026, which added $10.413 billion in assets, $7.510 billion in loans, and $8.716 billion in deposits to the company's balance sheet.

Net income rose 24.6% compared to $135.2 million in the second quarter of 2025. Excluding non-recurring items, net income increased 20.4% to $162.7 million. Diluted earnings per share were $1.67, compared with $1.42 in the prior-year period.

Net interest income before provision for credit losses rose 23.5% year-over-year to $330.6 million. The net interest margin on a tax-equivalent basis increased 29 basis points to 3.47% from 3.18% a year ago, though it declined slightly from 3.51% in the first quarter of 2026 due to one-time loan interest income in that period.

Noninterest income increased 41.2% year-over-year to $60.7 million. Growth was driven by the American and Southwest mergers and a $8.2 million gain on a Visa Class B-2 stock exchange. Noninterest expense rose $37.6 million from the prior year to $176.2 million, but fell $41.1 million from the $217.3 million reported in the first quarter as merger-related costs subsided.

Total assets grew 14.2% year-over-year to $43.873 billion. Total loans increased 12.8% from the prior year to $25.028 billion, although they decreased $260.0 million sequentially from the first quarter. Total deposits rose 18.7% year-over-year to $32.600 billion.

Credit quality improved as net charge-offs fell to $2.2 million for the quarter, down from $41.3 million in the first quarter of 2026.

Prosperity repurchased 200 thousand shares of common stock during the second quarter, bringing the total for 2026 to 1.04 million shares.